Good morning, and welcome to First Mover. Here’s what’s happening this morning:

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By Omkar Godbole

Major cryptocurrencies traded higher, extending the three-day winning trend as reports of Commerzbank applying for a crypto license revived hopes of faster mainstream adoption of digital assets.

Bitcoin (BTC), the leading cryptocurrency by market value, topped $42,500, having found buyers under $40,000 early this week. Technical analysts foresee a continued rise toward the 200-day simple moving average located above $48,000.

Ether (ETH), the second-largest cryptocurrency, rose to newly established resistance above $3,150. THETA, XMR and CAKE were other notable winners, boasting more than 6% gains on a 24-hour basis. 0x (ZRX), the native token behind the 0x protocol, rallied by more than 40% following an announcement that it will power Coinbase's NFT marketplace.

Germany's Commerzbank (CBK) applied for a crypto license earlier this year, a spokesperson for the bank said. That makes it the first major bank in Germany to move towards crypto adoption.

"Despite retail being fearful and uninterested, institutional adoption continues as the second-largest listed bank in Germany, Commerzbank, has now applied for a local crypto license," Marcus Sotiriou, an analyst at the U.K.-based digital asset broker Global Block said. "This would allow it to provide exchange and crypto-asset services and become the first major bank in Germany to make this step."

Mikkel Morch, executive director at crypto/digital asset hedge fund ARK36, said, "We [are] now starting to see adoption even from some of the most conservative players in the banking field. These moves can be interpreted as the beginnings of a race within the traditional banking field to gain a competitive edge by being the first entity in its local market to offer crypto services."

"Inevitably, this will only speed up the adoption of crypto as a mainstream financial service. However, it also shows that the demand for it is already so high across the whole spectrum of banking clients that it compels entities that were previously hostile to crypto to completely change course," Morch added.

The continued interest from institutions and venture capital firms is what differentiates the current crypto bear market from the last one seen in 2018. Back then, traditional institutions stayed away from digital assets, and many people left crypto jobs and moved to conventional finance.

In traditional markets, futures tied to the S&P 500 signaled risk-on with a 0.6% gain. The dollar index dropped while the euro rose on hawkish comments by the European Central Bank members.

Traders cited European Central Bank President Christine Lagarde's speech and Federal Reserve Chairman Jerome Powell's speech as the key events to watch out for. Both policymakers are scheduled to speak on Thursday at 15:00 UTC.

Hawkish comments may slow down bitcoin's ongoing ascent and the expected rise toward the 200-day average.

By Omkar Godbole

Ether's three-month implied volatility (IV) dropped to 3.5%, the lowest since November 2020. Implied volatility refers to options traders' expectations for price turbulence over a specific period.

The IV is now the cheapest relative to historical volatility since July 2021, according to data provided by Skew.

Historically, similar patterns have paved the way for big moves in ether.

Today’s newsletter was edited by Omkar Godbole and produced by Parikshit Mishra and Sheldon Reback.